Multifamily operators understand that when it comes to boosting your bottom line, having the right technologies on board, especially a solid revenue management system, can go a long way.
But the best operators remember that leasing agents and managers should be mentally equipped to make the right decisions for your property.
“There’s a human element involved to try and determine what your rent really needs to be,” said Todd Bowen, vice president of operations at Washington, D.C.-based Kettler Management, at the AFT Live Conference on April 9 in Las Vegas. “You have to go out there, you have to be transparent. Be prepared to change. As you determine what those rents are, the public will tell you what’s working and what’s not working.”
Bowen noted that operators should never let go of the steering wheel when using technologies. Although it’s important to listen to the system at hand, the anomalies that happen on a day-to-day basis must be taken into consideration. For example, military housing leaving a submarket: Such an event can have a huge effect on rent prices in an area, something that a revenue management system likely won’t take into consideration.
“You have to manage it and understand that rates are doing what they’re supposed to do,” he said. “You have to prepare to be able to stop the system.”
The same goes for implementing some of the rent increases that your software might tell you is appropriate. Knowledge about the entire market and the economics surrounding rent increases are important for managers to understand why they’re increasing rent. Further, it’s about helping residents understand that you’re still running a for-profit business, said Stephanie Brock, Central division president at Dallas-based Riverstone Residential.
“We should be more equipped with confidence and knowledge in our product to be able to sell that rent increase,” Brock said.
By empowering teams to make decisions on the spot and being proactive, resident issues can be prevented before they even occur.
Still, that dynamic pricing won’t be found without looking at each unit from an individualistic approach. Brock advised against a flat rent increase and encouraged using the tools available to determine an increase based on the individual unit, floor plan, and expirations. With this information, coupled with market details and knowledge of the local competition, rent increases can be made intelligently in accordance with revenue management systems.
Property managers might also want to consider investing in services that add direct value to the residents, like providing rent collection portals online.
“The cash flow and the collection on it more than pays for the actual cost of the service,” said Mark Segal, president and CEO at Chicago-based Habitat Co. “Everyone’s scrambling for time, everyone’s focused on convenience.”
Even though the technology makes the rent collection process easy, Segal said he encourages managers to create social spaces and events to get to know residents, as collecting rent electronically can cause months without interaction.
“You’ll know what’s going on so long as you build a relationship with the residents,” Segal said. “That’ a 365-day process, getting to know them.”
